JOINT REPORT ON MDB CLIMATE FINANCE
2013
A report by a group of Multilateral Development Banks (MDBs) comprising the African
Development Bank (AfDB), the Asian Development Bank (ADB), the European Bank for
Reconstruction and Development (EBRD), the European Investment Bank (EIB), the InterAmerican Development Bank (IDB), and the International Finance Corporation (IFC) and
World Bank (WB) from the World Bank Group (WBG)
September 2014
EXECUTIVE SUMMARY 1
This is the third edition of the joint MDB Report on Climate Finance and the information provided has been
expanded to include a better sectoral breakdown, and split by public and private operations.
Multilateral Development Banks (MDBs) provided USD 23.8 billion in financing in 2013 to address the challenges
of climate change and, since 2011, have provided over USD 75 billion in climate finance to developing and
emerging economies.
Of the total USD 23.8 billion in climate finance, 80%, or USD 18.9 billion, was dedicated to mitigation and 20%, or
USD 4.8 billion, to adaptation. Of the total commitments, 9%, or USD 2.2 billion, came from external resources,
such as bilateral or multilateral donors, including the Global Environment Facility and the Climate Investment
Funds.
This report covers finance for mitigation, adaptation and projects with dual adaptation and mitigation benefits.
As in previous years, the calculation of mitigation finance is based on a common list of activities at the
intersection of what all MDBs consider mitigation. Adaptation finance is calculated using the joint MDB
methodology based on a context- and location-specific approach. Data reported in both cases corresponds to the
financing of those components and/or sub-components or elements/proportions of projects that provide
mitigation and/or adaptation benefits (rather than the entire project cost).
Some MDBs have different internal accounting approaches for mitigation. In such cases, the volume of each
MDB’s climate finance mitigation calculated using their internal methodologies is separately reported.
The regional coverage for 2013 is quite balanced with two regions (East Asia and Pacific, Non-EU Europe and
Central Asia) each receiving roughly 20% of total climate finance provided and four regions (South Asia, SubSaharan Africa, Latin America and Caribbean, EU New Member States) 10-15% each. In regards to sector
coverage, 22% of adaptation finance went to “Coastal and riverine infrastructure (including built flood protection
infrastructure)” and 30% to the category comprising “Energy, transport, and other built environment and
infrastructure”. In mitigation finance, renewable energy still takes by far the largest share, with 25% of the total.
1
For any questions or comments, please email [email protected]
1
TABLE OF CONTENTS
EXECUTIVE SUMMARY .............................................................................................................................................. 1
INTRODUCTION .......................................................................................................................................................... 4
SECTION 1: MDB CLIMATE FINANCE, 2013 ................................................................................................................ 5
1.
TOTAL MDB CLIMATE FINANCE, 2013 ........................................................................................................ 5
2.
MDB ADAPTATION FINANCE, 2013 ............................................................................................................. 8
3.
MDB MITIGATION FINANCE, 2013 ............................................................................................................ 11
4.
FINANCE WITH DUAL ADAPTATION AND MITIGATION BENEFITS, 2013 ................................................ 15
SECTION 2: GENERAL ............................................................................................................................................... 16
1.
DEFINITIONS: ............................................................................................................................................. 16
2.
GEOGRAPHICAL COVERAGE OF THE REPORT, AND REGIONAL BREAKDOWNS ...................................... 17
3.
GUIDANCE SECTION ON THE ADAPTATION FINANCE TRACKING METHODOLOGY ................................ 19
1)
Background and guiding principles ............................................................................................................. 19
2)
Overview of the adaptation finance tracking methodology ....................................................................... 19
a.
Context of vulnerability to climate variability and change ......................................................................... 19
b.
Statement of purpose or intent .................................................................................................................. 19
c.
Clear and direct link between climate vulnerability and project activities ................................................. 19
3)
Reporting of project activities with dual benefits ....................................................................................... 20
4)
Adaptation case studies .............................................................................................................................. 21
4.
JOINT MDB APPROACH FOR MITIGATION FINANCE REPORTING ........................................................... 24
1)
Principles of the Joint MDB Mitigation Finance Reporting ......................................................................... 24
2)
Typology of Mitigation Activities included in the Joint MDB Mitigation Finance Reporting ...................... 25
3)
Mitigation case studies ............................................................................................................................... 27
4)
Mapping mitigation sectors (shown in table 8) against the Mitigation Typology ...................................... 30
2
List of Tables
Table 1: MDB Climate Finance, 2013 (USD millions) .................................................................................................. 6
Table 2: MDB Climate Finance by Region, 2013 (USD millions) ................................................................................. 7
Table 3: MDB Adaptation Finance, 2013 (USD millions) ............................................................................................ 8
Table 4: MDB Adaptation Finance by Region, 2013 (USD millions) ........................................................................... 9
Table 5: MDB Adaptation Finance by Sectors, 2013 (USD millions) ........................................................................ 10
Table 6: MDB Mitigation Finance According to the Joint Approach, 2013 (USD millions)....................................... 11
Table 7: MDB Mitigation Finance by Region, 2013 (USD millions) .......................................................................... 11
Table 8: MDB Mitigation Finance by Sectors, 2013 (USD millions) .......................................................................... 13
Table 9: Mitigation Finance showing differences from MDB joint methodology ................................................... 14
Table 10: MDB Finance with dual adaptation and mitigation benefit figures 2013 (USD millions) ......................... 15
Table 11: Adaptation Sectors and Examples of Sub-Sectors .................................................................................... 20
Table 12: Indicative Examples of Climate Resilience Activities by Sub-Sector ......................................................... 21
Table 13: Mitigation Sector Definition ..................................................................................................................... 30
List of Figures
Figure 1: MDB Climate Finance, 2013 (USD millions) ................................................................................................ 6
Figure 2: MDB Climate Finance by Region, 2013 (USD millions) ................................................................................ 7
Figure 3: MDB Adaptation Finance, 2013 (USD millions) ........................................................................................... 8
Figure 4: MDB Adaptation Finance by Region, 2013 (USD millions) .......................................................................... 9
Figure 5: MDB Adaptation Finance by Sectors, 2013 (USD millions) ....................................................................... 10
Figure 6: MDB Mitigation Finance According to the Joint Approach, 2013 (USD millions) ..................................... 11
Figure 7: MDB Mitigation Finance by Region, 2013 (USD millions) ......................................................................... 12
Figure 8: MDB Mitigation Finance by Sectors, 2013 (USD millions) ........................................................................ 13
3
INTRODUCTION
The international community recognises the need to join forces to avert dangerous climate change and to adapt
to unavoidable climate change. This requires mobilising a wide range of financial resources, public and private,
bilateral and multilateral, including alternative sources. That makes it increasingly important to track and report
financial flows that support climate change mitigation and adaptation, to build trust and accountability with
regard to climate finance commitments, and to monitor trends and progress in climate-related investment.
The present report is based on the joint MDB approach for climate finance reporting, which was first reported in
2012 by the group of Multilateral Development Banks (MDBs - the Asian Development Bank (ADB), the African
Development Bank (AfDB), the European Bank for Reconstruction and Development (EBRD), the European
Investment Bank (EIB), the Inter-American Development Bank (IDB) and the International Financial Corporation
(IFC) and World Bank (WB) from the World Bank Group (WBG)) to work towards better climate finance tracking.
It responds to the particular context of the activities that the MDBs carry out in developing and emerging
economies and is built on the premise that climate finance and development are closely aligned. This is the third
2
year that the group of MDBs have carried out joint reporting. Climate finance reported by MDBs is based on the
definitions in section 2.1 and is for the fiscal year 2013.
Since 2011, when MDBs began jointly tracking climate finance flows, we have already delivered over USD 75
billion in financing for climate action in developing and emerging countries. Setting meaningful targets and
identifying opportunities requires consistent and robust data and therefore the group of MDBs has continued to
improve the joint approach and refine the classification of activities. The following additions were introduced in
this year’s report:
-
In order to give information about the nature of the recipients of climate finance, the data in this
year’s report is broken down by public and private 3 recipients/borrowers;
Finance with dual adaptation and mitigation benefits has been separately presented;
The adaptation sectoral breakdown has been revised in order to present more detailed information
on the main sectors in which MDBs provided adaptation finance;
Minor adjustments were made to the mitigation typology, including separate reporting of the
category: “EE and RE financing through financial intermediaries”, due to the importance of
intermediated lending in those sectors; and
Mitigation case studies have been included to better illustrate the mitigation methodology.
The joint approach serves as a tool for MDBs to consistently measure their engagement in climate change in a
transparent and harmonised manner. MDBs are also in contact with other stakeholders to discuss commonalities
and differences among climate finance tracking approaches with the aim of potential harmonisation.
MDBs’ activities on climate change go beyond financial operations in many areas, such as for example advice on
project design, policy dialogue or the application of climate-specific safeguards. Much of the technical support to
our clients on climate change may be of small volumes but with major impacts. Likewise, MDB collaboration on
climate change goes beyond this report. We especially collaborate on estimating greenhouse gas emissions from
projects and co-financing including in Climate Investment Funds (CIFs). Regarding adaptation, MDBs are aware
that good adaptation goes beyond purely physical investments and therefore, although this report tracks
finance, the MDBs also prioritise support for adaptive management / adaptive procedures: for example, changes
in operating or maintenance procedures making projects more resilient.
The report has two main sections. Section 1 contains total MDB climate finance figures for 2013 as well as the
detailed data, broken down by adaptation and mitigation and by sector and geographic region. Section 2 gives
explanations on the MDB joint approach definitions, geographical coverage and sectoral breakdown. It also
contains a guidance section and provides case studies to illustrate the MDB adaptation and mitigation climate
finance tracking approach.
2
Mitigation Report 2011: http://www.eib.org/attachments/documents/joint_mdb_report_on_mitigation_finance_2011.pdf
- coordinated by IDB
Adaptation Report 2011: http://www.afdb.org/fileadmin/uploads/afdb/Documents/GenericDocuments/Joint%20MDB%20Report%20on%20Adaptation%20Finance%202011.pdf - coordinated by AfDB.
Joint Report 2012: http://www.ebrd.com/downloads/sector/sei/climate-finance-2012.pdf - coordinated by EBRD.
Joint Report 2013: http://www.eib.org/attachments/documents/joint_report_on_mdb_climate_finance_2013.pdf coordinated by EIB
3
For the definition of public and private recipients/borrowers, please refer to section 2.
4
SECTION 1: MDB CLIMATE FINANCE, 2013
1. TOTAL MDB CLIMATE FINANCE, 2013
The tables below present total climate finance 4 provided by the MDBs in 2013 in developing, emerging and
transition economies according to the joint MDB approach, based on the principles set out in the first reports
published in 2012 and 2013 and explained in more detail in Section 2 of this report. Definitions of terms are
included in Section 2.1.
The approach covers both MDBs’ own resources and external resources managed by the MDBs (such as funding
from the Global Environment Facility, the Climate Investment Funds, Carbon Funds or the EU facilities). To
prevent double counting (in particular as some external resources may already be covered in bilateral reporting),
external resources managed by the MDBs are clearly separated from MDBs’ own resources.
For this year’s report, additional columns were added to all tables to show how MDB climate finance is split
between public and private operations based on the status of the first recipient/borrower. 5
Table 1 reports total climate finance figures for 2013 using the joint MDB approach, alongside each MDB’s total
finance figures. Table 2 shows the same figures with a regional breakdown.
4
5
Total MDB climate finance is equal to the sum of mitigation, adaptation and dual benefit finance (Sections 1.2, 1.3 and 1.4).
Refer to Section 2 for clarifications on public/private split.
5
Table 1: MDB Climate Finance, 2013 (USD millions) 6
MDB Resources
MDB
Investment
and technical
assistance
External Resources
Policy-based
instruments
Public
Private
AfDB
622
426
ADB
2,324
EBRD
Investment
and technical
assistance
Policy-based
instruments
Total MDB
Climate
Finance
Total MDB
Finance
Public
Private
-
116
40
-
1,205
6,699
503
-
294
147
-
3,268
21,023
1,064
2,255
-
63
78
-
3,460
11,286
EIB
3,698
1,526
-
-
-
-
5,224
23,496
IDB
639
293
66
142
80
-
1,220
14,398
IFC
85
2,404
-
9
167
4
2,669
18,581
WB
4,938
-
712
928
179
-
6,757
33,453
Sub - Total
13,371
7,407
1,552
691
4
23,804
128,937
TOTAL
20,779
778
2,243
Figure 1: MDB Climate Finance, 2013 (USD millions)
AfDB; USD 1,205
million; 5%
WB; USD 6,757
million; 28%
ADB; USD 3,268
million; 14%
EBRD; USD 3,460
million; 15%
IFC; USD 2,669
million; 11%
EIB; USD 5,224
million; 22%
IDB; USD 1,220
million; 5%
6
A unified exchange rate of 1.3281 EUR/USD (average exchange rate for 2013 as per the European Central Bank – ECB) was
applied for both EBRD and EIB figures, which are usually reported in euro.
6
Table 2: MDB Climate Finance by Region 7, 2013 (USD millions)
MDB Resources
Investments
and technical
assistance
Region
Public
Private
SOUTH ASIA
2,246
514
EAST ASIA AND THE PACIFIC
2,459
798
External Resources
Policy-based
instruments
Investments
and technical
assistance
Policy-based
instruments
Total
MDB
Climate
Finance
per
region
Total
MDB
Finance
per
region
Public
Private
100
230
30
1
3,120
16,600
70
704
276
1
4,308
19,016
416
57
67
17
2
0
559
4,749
SUB-SAHARAN AFRICA
1,480
1,204
64
201
107
0
3,057
17,517
LATIN AMERICA AND THE CARIBBEAN
1,195
827
467
179
138
1
2,806
24,528
EU 13
2,056
1,243
-
54
12
-
3,365
18,143
NON EU- EUROPE AND CENTRAL ASIA
2,624
2,266
10
112
105
0
5,117
22,4463
REGIONAL
895
497
-
55
22
1
1,471
5,921
Sub - Total
13,371
7,407
1,552
691
4
23,804
128,937
MIDDLE EAST AND NORTH AFRICA
TOTAL
20,779
778
2,243
Figure 2: MDB Climate Finance by Region, 2013 (USD millions)
REGIONAL ; USD 1,471
million; 6%
SOUTH ASIA; USD
3,120 million; 13%
NON EU- EUROPE AND
CENTRAL ASIA; USD
5,117 million; 22%
EAST ASIA AND THE
PACIFIC; USD 4,308
million; 18%
MIDDLE EAST AND
NORTH AFRICA; USD
559 million; 2%
EU 13; USD 3,365
million; 14%
SUB-SAHARAN AFRICA;
USD 3,057 million; 13%
LATIN AMERICA AND
THE CARIBBEAN; USD
2,806 million; 12%
7
Refer to Section 2.2 for further details. This regional classification does not necessarily follow the precise regional
classifications in use in various MDBs.
7
2. MDB ADAPTATION FINANCE, 2013
The tables below (3-5) present adaptation finance provided by the MDBs for 2013 according to the joint MDB
approach. Table 3 reports the total adaptation finance per MDB, table 4 reports the same figures according to
the regional coverage, and table 5 reports the same figures per sector. 8
Data reported corresponds to the financing of adaptation projects or of those components, sub-components or
elements within projects that provide adaptation benefits (rather than the entire project cost). For MDBs that
report dual benefits separately (see section 1.4), this table does not include the adaptation elements of that dual
benefit financing, this is shown separately in table 10.
Table 3: MDB Adaptation Finance, 2013 (USD millions)
MDB
MDB Resources
Investments
and technical
Policy-based
assistance
instruments
Public
Private
External Resources
Investments
and technical
Policy-based
assistance
instruments
Public Private
TOTAL
AfDB
386
-
-
51
-
-
437
ADB
879
-
-
101
-
-
980
EBRD
104
51
-
32
-
-
187
EIB
166
-
-
-
-
-
166
IDB
104
2
6
7
2
-
121
IFC
-
8
-
-
-
-
USD 8
WB
2,251
-
481
195
-
-
2,927
Sub -Total
3,890
61
386
2
-
4,826
TOTAL
3,951
388
487
Figure 3: MDB Adaptation Finance, 2013 (USD millions)
AfDB; USD 437
million; 9%
ADB; USD 980
million; 20%
WB; USD 2,927
million; 61%
EBRD; USD 187
million; 4%
EIB; USD 166 million;
3%
IDB; USD 121
million; 3%
IFC; USD 8 million;
0%
8
Refer to section 2.3 for details of adaptation methodology and sectors and sub-sectors for adaptation finance.
8
Table 4: MDB Adaptation Finance by Region 9, 2013 (USD millions)
MDB Resources
Investments
and technical
Policy-based
assistance
instruments
REGION
Public
Private
SOUTH ASIA
847
-
EAST ASIA AND THE PACIFIC
978
External Resources
Investments
and technical
Policy-based
assistance
instruments
TOTAL
Public
Private
50
110
-
-
1,008
-
35
60
-
-
1,072
0
8
67
10
-
-
85
SUB-SAHARAN AFRICA
786
-
57
109
-
-
952
LATIN AMERICA AND THE CARIBBEAN
178
0
278
16
0
-
473
MIDDLE EAST AND NORTH AFRICA
EU 13
75
4
-
27
-
-
106
NON-EU EUROPE AND CENTRAL ASIA
214
46
-
42
-
-
301
REGIONAL
812
3
-
13
2
-
829
Sub -Total
3,890
61
386
2
-
4,826
TOTAL
3,951
487
388
Figure 4: MDB Adaptation Finance by Region, 2013 (USD millions)
REGIONAL; USD 829
million; 17%
SOUTH ASIA; USD
1,008 million; 21%
NON-EU EUROPE AND
CENTRAL ASIA; USD
301 million; 6%
EU 13; USD 106
million; 2%
EAST ASIA AND THE
PACIFIC; USD 1,072
million; 22%
LATIN AMERICA AND
THE CARIBBEAN; USD
473 million; 10%
MIDDLE EAST AND
NORTH AFRICA; USD
85 million; 2%
SUB-SAHARAN AFRICA;
USD 952 million; 20%
9
Refer to Section 2.2 for regional breakdown.
9
Table 5: MDB Adaptation Finance by Sectors, 2013 (USD millions)
MDB Resources
Investments
and technical
assistance
SECTOR
Public
Private
Water & wastewater systems
683
8
Agricultural & ecological resources
721
Industry, Extractive industries, Manufacturing & Trade
Coastal & riverine infrastructure (including built flood
protection infrastructure)
External Resources
Policy-based
instruments
Investments
and technical
assistance
Policy-based
instruments
TOTAL
Public
Private
-
97
-
-
788
33
119
112
-
-
986
64
5
45
0
-
-
114
929
-
34
84
-
-
1,047
1,305
8
43
66
-
-
1,422
Institutional Capacity
133
2
220
16
2
-
372
Cross sectors & other
56
5
27
10
0
-
98
3,890
61
386
2
-
4,826
Energy, transport, and other built environment and
Infrastructure
Sub -Total
TOTAL
3,951
487
388
Figure 5: MDB Adaptation Finance by Sectors, 2013 (USD millions)
Institutional capacity;
USD 372 million; 8%
Cross sectors & other;
USD 98 million; 2%
Water & wastewater
systems; USD 788
million; 16%
Energy, transport, and
other built
environment and
Infrastructure; USD
1,422 million; 30%
Agricultural &
ecological resources;
USD 986 million; 20%
Coastal & riverine
infrastructure
(including built flood
protection
infrastructure); USD
1,047 million; 22%
10
Industry, extractive
industries,
manufacturing & trade;
USD 114 million; 2%
3. MDB MITIGATION FINANCE, 2013
The tables below (6-8) report mitigation finance: in total, by region, and by sector, using the joint MDB approach
for reporting, which is based on a common list of mitigation activities at the intersection of what all MDBs
consider mitigation. As was done for adaptation, mitigation figures reported correspond to the financing of those
components and/or sub-components or elements of projects that provide mitigation benefits (rather than the
entire project cost) 10. For MDBs that report dual benefit financing separately (see Section 1.4); this table does
not include the mitigation elements of that dual benefit financing. This is shown separately in table 10.
Table 6: MDB Mitigation Finance According to the Joint Approach, 2013 (USD millions)
MDB Resources
Investments
and technical
Policy-based
assistance
instruments
Public
Private
MDB
External Resources
Investments
and technical
Policy-based
assistance
instruments
Public
Private
TOTAL
AfDB
236
426
-
65
40
-
768
ADB
1,443
503
-
179
147
-
2,272
EBRD
945
2,187
-
32
78
-
3,242
EIB
3,532
1,526
-
-
-
-
5,058
IDB
535
290
60
133
78
-
1,097
IFC
85
2,396
-
9
167
4
2,662
WB
2,687
-
231
733
179
-
3,830
Sub - Total
9,464
7,329
1,151
689
4
18,929
TOTAL
16,793
1,840
291
Figure 6: MDB Mitigation Finance According to the Joint Approach, 2013 (USD millions)
WB; USD 3,830 million;
20%
AfDB; USD 768 million;
4%
ADB; USD 2,272
million; 12%
EBRD; USD 3,242
million; 17%
IFC; USD 2,662 million;
14%
IDB; USD 1,097 million;
6%
10
EIB; USD 5,058 million;
27%
Refer to Section 2.4 for details of mitigation methodology and sectors and sub-sectors for mitigation finance.
11
Table 7: MDB Mitigation Finance by Region 11, 2013 (USD millions)
MDB Resources
REGION
Investments
and technical
assistance
Public
Private
SOUTH ASIA
1,399
514
EAST ASIA AND THE PACIFIC
1,482
MIDDLE EAST AND NORTH AFRICA
SUB-SAHARAN AFRICA
External Resources
Policy-based
instruments
Investments
and technical
assistance
Policy-based
instruments
TOTAL
Public
Private
50
120
30
1
2,113
798
35
644
276
1
3,236
416
47
-
7.5
1.6
0
472
694
1,204
7
92
107
0
2,105
LATIN AMERICA AND THE CARIBBEAN
1,016
826
189
162
137
1
2,332
EU 13
1,973
1,232
-
28
12
-
3,244
NON -EU EUROPE AND CENTRAL ASIA
2,403
2,218
10
70
105
0
4,807
REGIONAL
81
490
-
28
20
1
620
Sub -Total
9,464
7,329
1,151
689
4
18,929
TOTAL
16,793
291
1,840
Figure 7: MDB Mitigation Finance by Region, 2013 (USD millions)
REGIONAL , USD 620
million, 3%
SOUTH ASIA, USD
2,113 million, 11%
NON -EU EUROPE
AND CENTRAL ASIA,
USD 4,807 million,
26%
EAST ASIA AND THE
PACIFIC, USD 3,236
million, 17%
MIDDLE EAST AND
NORTH AFRICA, USD
472 million, 3%
EU 13, USD 3,244
million, 17%
LATIN AMERICA AND
THE CARIBBEAN,
USD 2,332 million,
12%
11
Refer to Section 2.2 for regional breakdown.
12
SUB-SAHARAN
AFRICA, USD 2,105
million, 11%
Table 8: MDB Mitigation Finance by Sectors, 2013 (USD millions)
MDB Resources
Investments
and technical
assistance
SECTOR
Public
Private
Energy Efficiency
2,541
1,568
Renewable Energy
2,355
Transport
External Resources
Policy-based
instruments
Investments
and technical
assistance
Policy-based
instruments
TOTAL
Public
Private
37
105
67
3
4,321
1,891
51
196
324
1
4,818
3,580
593
6
51
-
0
4,230
Agriculture, forestry and land use
256
270
12
168
9
0
715
Waste and Waste Water
180
48
2
19
1
-
249
Cross-sector activities and others
342
489
183
609
191
-
1,814
EE and RE financing through financial intermediaries
211
2,470
-
3
98
0
2,781
9,464
7,329
1,151
689
Sub - Total
TOTAL
16,793
291
1,840
Figure 8: MDB Mitigation Finance by Sectors, 2013 (USD millions)
EE and RE financing
through financial
intermediaries; USD
2,781 million; 15%
Energy Efficiency; USD
4,321 million; 23%
Cross-sector activities
and others; USD 1,814
million; 10%
Waste and
wastewater; USD 249
million; 1%
Agriculture, forestry
and land use; USD 715
million; 4%
Renewable Energy;
USD 4,818 million; 25%
Transport; USD 4,230
million; 22%
13
4
18,929
MDB Mitigation Finance outside the joint methodology
The joint mitigation methodology is a list of mitigation activities at the intersection of what all MDBs consider
mitigation. However, some MDBs consider additional activities not covered by the joint approach as mitigation,
for their own reporting.
For 2013, ADB, IDB, IFC and WB reported different figures according to their internal mitigation finance tracking
approach. The IDB has an internal methodology which covers climate change, sustainable energy and
environmental sustainability and is therefore not directly comparable to the figures reported under the joint
MDB approach (see footnote) 12. Table 9 below shows volumes the other MDBs counted outside the joint
approach according to their own internal methodologies and differences from the MDB joint approach.
Table 9: Mitigation Finance showing differences from MDB joint methodology 13
MDB
ADB's mitigation finance as per its
internal methodology
ADB's mitigation finance as per MDB
methodology
Difference
IFC mitigation finance as per its
internal methodology
IFC mitigation finance as per MDB
methodology
MDB Resources
Investment
and technical
Policy-based
assistance
Instruments
Public
Private
1,554
520
1,443
503
111
16
85
2,415
85
2,396
External Resources
Investment
and technical
Policy-based
assistance
Instruments
Public
Private
Total
2,415
180
162
179
147
2
15
-
9
167
4
2,681
-
9
167
4
2,662
-
-
2,272
144
Difference
WB mitigation finance as per its
internal methodology
WB mitigation finance as per MDB
methodology
20
20
2,930
-
231
733
179
-
4,073
2,687
-
231
733
179
-
3,830
Difference
243
243
12
The IDB has an internal methodology to quantify how it meets its lending target under its 9th general capital increase and
incorporates projects related to climate change, sustainable energy and environmental sustainability. Under this
methodology, IDB has reported USD 2.9 billion that is not comparable to MDB numbers because: the IDB internal
methodology a) accounts exclusively for loans, b) counts the full loan amount, rather than only climate components, and c)
includes sustainable energy and environmental sustainability.
13
Differences include, for example, wider interpretation of a) EE projects and b) mitigation transport projects.
14
4. FINANCE WITH DUAL ADAPTATION AND MITIGATION BENEFITS, 2013
MDBs recognise that some components and/or sub-components or elements within projects contribute to both
mitigation and adaptation (thereby having dual benefits: adaptation and mitigation 14). Because this financing is
important, albeit currently a small volume of climate finance, it has been decided to report it separately where
MDB systems allow.
For the 2012 finance report, MDBs did identify the components with dual benefits. MDBs, depending on their
internal reporting system, decided to split the figures between mitigation and adaptation and add the assigned
figures to either mitigation or adaptation tables. This was done so that the adaptation and mitigation figures
could be added together, to give a climate finance total with no double counting.
For this year, ADB, EBRD and IDB have highlighted dual benefit figures separately according to their internal
systems and this is therefore reported in table 10. The other MDBs, not listed in table 10, when financing
projects of this nature, have split the financed amount between mitigation and adaptation (and included this in
the tables in Sections 1.2 and 1.3). In both cases there is no double counting. Examples are given below to
demonstrate the two accounting methods.
Table 10: MDB Finance with dual adaptation and mitigation benefit figures 2013 (USD millions)
MDB Resources
MDB
Investments
and technical
assistance
Public
Private
ADB
2.1
0.0
EBRD
16.1
IDB
0.2
TOTAL
34.4
External Resources
Investments
and technical
assistance
Policy-based
instruments
Policy-based
instruments
Total
Public
Private
0.0
14.1
0.0
0.0
16.2
15.3
0.0
0.0
0.0
0.0
31.3
0.8
0.0
1.3
0.0
0.0
2.2
0.0
49.7
0.0
15.3
Illustrative examples of different accounting approaches for dual benefit finance
Project
Afforestation and Erosion Control
Sector
Forestry
Climate vulnerability context and
The project is an afforestation project, (mitigation category 6.1.1).
intent to address climate change
Its intent is also to provide erosion control and slope stability in response to
impacts
increased climate risk, meeting MDB methodology for adaptation. Therefore, it is
intended to deliver the dual benefit of both climate mitigation and adaptation.
The project was considered 100% climate finance (MDB loan USD 150 million).
Accounting method 1
Accounting method 2
Loan split 50/50 between adaptation
The entire loan amount was reported
(USD 75 M) and mitigation (USD 75 M)
separately as finance with dual
and included within the concerned
adaptation and mitigation benefits.
MDB’s adaptation and mitigation
figures respectively and reported in the The entire loan amount would be
relevant adaptation and mitigation
reported in table 10.
tables.
Nothing would be reported in table 10.
14
Examples could include: a) an afforestation project to prevent slope erosion in an area with increased risk of flash floods
(whole project has both mitigation and adaptation benefits), or b) the incremental cost of adding climate resilience to a
renewable energy project (the whole project is mitigation and the incremental cost is adaptation).
15
SECTION 2: GENERAL
1. DEFINITIONS:
•
•
•
•
•
•
•
•
•
•
•
•
Reporting period: Data covers fiscal year 2013. Even though MDBs do not follow the same reporting
cycle, data remains comparable across MDBs as they all correspond to a 12-month period.
Point of reporting: Data corresponds to commitments at time of Board approval or financial agreement
signature, and are therefore based on ex-ante estimation. All due efforts have been taken to prevent
double counting. No corrections will be issued in cases where a project’s scope has changed to either
increase or decrease climate financing.
Sources covered: MDBs’ own resources as well as a range of external resources managed by the MDBs.
Public and private: this is based on the status of the first recipient/borrower of the MDB finance. The
first recipient /borrower is to be considered public when at least 50% is publically owned 15.
Financing instruments: All instruments associated with the resources covered (grant, loan, guarantee,
equity, performance-based instrument).
Comparability: The numbers in this report are comparable with the ones in the 2012 report but not
comparable to the ones in the 2011 report due to different geographic categories.
Extrapolation of data: Given that the MDBs’ climate finance numbers are for only one year they should
not be used to make any extrapolations about the MDBs’ level of engagement in climate finance.
External resources: refers to trust-funded operations (including dedicated climate finance facilities)
which might be reported to the OECD’s Development Assistance Committee by the contributor
countries as well.
Policy-based instruments: fast-disbursing financing instruments provided to the national budget in the
form of loans or grants together with associated policy dialogue and economic and sector work in
support of nationally driven policy and institutional reforms.
Investments and technical assistance: relates to all vehicles used by MDB clients to support specific
investments covering a mix of capital and recurrent expenditures as well as advisory services and
capacity building.
Granularity: Finance reported covers only those components (and/or sub-components to the extent
data is available) or elements with activities that directly contribute to (or promote) adaptation and/or
mitigation.
Reporting: Reporting is complete for all fields and all tables, i.e. if a value in a table is ‘0’ then the value
is below 0.5m and if the value is ‘-‘ this means nothing was reported. As all finance figures are rounded
to the nearest USD million or USD hundred thousand, tables summed by hand may not give the exact
result shown as the total figures in the tables.
15
It is acknowledged that this is a complicated topic and that the status of the first recipient/borrower may not be the same
as the final beneficiary/borrower. For example: loan to national development bank for EE in SMEs. This is particularly
complicated when there is a public private partnership (PPP).
16
2. GEOGRAPHICAL COVERAGE OF THE REPORT, AND REGIONAL BREAKDOWNS
Countries included in this list are all countries covered by at least one of the MDBs reporting. Inclusion of
countries in this list does not imply any recognition of country names, borders, etc. by any of the MDBs in
question.
SOUTH ASIA
Afghanistan
Bangladesh
Bhutan
India
Maldives
Nepal
Cambodia
People’s Republic of China
Cook Islands
Fiji
Indonesia
Kiribati
Lao People’s Democratic Republic
Malaysia
EAST ASIA AND THE PACIFIC
Marshall Islands
Micronesia (Federated States of)
Mongolia
Myanmar
Nauru
Palau
Papua New Guinea
Philippines
Algeria
Egypt
Iran (Islamic Republic of)
Iraq
Israel
MIDDLE EAST AND NORTH AFRICA
Jordan
Lebanon
Libya
Morocco
Gaza/West Bank
Angola
Benin
Botswana
Burkina Faso
Burundi
Cameroon
Cape Verde
Central African Republic
Chad
Comoros
Congo
Côte d’Ivoire
Democratic Republic of the Congo
Djibouti
Equatorial Guinea
Eritrea
Ethiopia
Gabon
Anguilla
Antigua and Barbuda
Argentina
Aruba
Bahamas
Barbados
Belize
SUB-SAHARAN AFRICA
Gambia
Ghana
Guinea
Guinea-Bissau
Kenya
Lesotho
Liberia
Madagascar
Malawi
Mali
Mauritania
Mauritius
Mayotte
Mozambique
Namibia
Niger
Nigeria
LATIN AMERICA AND THE CARIBBEAN
Dominica
Dominican Republic
Ecuador
El Salvador
Falkland Islands (Malvinas)
French Guiana
Grenada
17
Pakistan
Sri Lanka
Samoa
Solomon Islands
Thailand
Timor-Leste
Tonga
Tuvalu
Vanuatu
Vietnam
Syria
Tunisia
Western Sahara
Yemen
Réunion
Rwanda
São Tomé and Príncipe
Saint Helena
Senegal
Seychelles
Sierra Leone
South Africa
Somalia
South Sudan
Sudan
Swaziland
Togo
Uganda
United Republic of Tanzania
Zambia
Zimbabwe
Panama
Paraguay
Peru
Puerto Rico
Saint-Barthélemy
Saint Kitts and Nevis
Saint Lucia
Bolivia (Plurinational State of)
Bonaire, Saint Eustatius and Saba
Brazil
British Virgin Islands
Cayman Islands
Chile
Colombia
Costa Rica
Cuba
Curaçao
Guadeloupe
Guatemala
Guyana
Haiti
Honduras
Jamaica
Martinique
Mexico
Montserrat
Nicaragua
Bulgaria
Croatia
Cyprus
Czech Republic
Estonia
Hungary
Latvia
Lithuania
Malta
Poland
Albania
Armenia
Azerbaijan
Belarus
Bosnia and Herzegovina
Georgia
Kazakhstan
Saint Martin (French part)
Saint Vincent and the Grenadines
Saint Maarten (Dutch part)
Suriname
Trinidad and Tobago
Turks and Caicos Islands
United States Virgin Islands
Uruguay
Venezuela (Bolivarian Republic of)
EU 13
NON-EU EUROPE AND CENTRAL ASIA 16
Kyrgyz Republic
Kosovo
Montenegro
Republic of Moldova
Russian Federation
Serbia
The Former Yugoslav Republic of
Macedonia
Romania
Slovakia
Slovenia
Turkey
Tajikistan
Turkmenistan
Ukraine
Uzbekistan
REGIONAL
Any operation by an MDB that is implemented across two or more countries including activities with a global
focus
16
Previously reported “(OTHER) Europe and Central Asia”
18
3. GUIDANCE SECTION ON THE ADAPTATION FINANCE TRACKING
METHODOLOGY
1)
Background and guiding principles
The MDB climate adaptation finance tracking methodology uses a context- and location-specific, conservative
and granular approach that is intended to reflect the specific focus of adaptation activities, and reduce the scope
for over-reporting of adaptation finance against projects. The approach drills down into the ‘sub-project' or
'project element' level as appropriate, in line with the overall MDB climate finance tracking methodology. It also
employs a clear process in order to ensure that project activities address specific climate vulnerabilities identified
as being relevant to the project and its context/location.
2) Overview of the adaptation finance tracking methodology
The methodology comprises the following key steps:
• Setting out the context of climate vulnerability of the project
• Making an explicit statement of intent to address climate vulnerability as part of the project
• Articulating a clear and direct link between the climate vulnerability context and the specific project
activities
Furthermore, when applying the methodology, the reporting of adaptation finance is limited solely to those
project activities (i.e. projects, project components, or proportions of projects) that are clearly linked to the
climate vulnerability context.
a. Context of vulnerability to climate variability and change
For a project to be considered as contributing to adaptation, the context of climate vulnerability needs to be set
out clearly using a robust evidence base. This could take a variety of forms, including the use of material from
existing analyses and reports, or original, bespoke climate vulnerability assessment analysis carried out as part of
the preparation of a project.
Examples of good practice in the use of existing analyses or reports include using sources that are authoritative
and preferably peer-reviewed, such as academic journals, National Communications to the UNFCCC, IPCC
reports, Strategic Programmes for Climate Resilience, etc.
Examples of good practice in conducting original, bespoke analysis include using records from trusted sources
showing vulnerable communities or ecosystems particularly vulnerable to climate change as well as recent
climate trends including any departures from historic means. These may be combined with climate change
projections drawn from a wide range of climate change models, with high and low GHG emissions scenarios, in
order to explore the full envelope of projected outcomes and uncertainties. Climate projection uncertainties
should be presented and interpreted in a transparent way. The timescale of the projected climate change
impacts should match the intended lifespan of the assets, systems or institutions being financed through the
project (e.g. time horizon of 2030, 2050, 2080, etc.).
b. Statement of purpose or intent
The project should set out how it intends to address the context- and location-specific climate change
vulnerabilities, as set out in existing analyses, reports or in the project’s climate vulnerability assessment. This is
important for making the distinction between a project contributing to climate change adaptation and a standard
‘good development’ project. The methodology is flexible about exactly where/how the statement of
intent/purpose is documented. As long as the MDB concerned is able to record and track the rationale for each
adaptation project or adaptation component of a project linked to the context of climate vulnerability
established above, this could be documented in the final technical document, Board document, or an internal
memo, or other associated project document.
c. Clear and direct link between climate vulnerability and project activities
In line with the principles of the overall MDB climate finance tracking methodology, only the specific project
activities that explicitly address climate vulnerabilities identified in the project documentation are reported as
climate finance. Where climate change adaptation is incorporated into project activities that also have other
objectives, the estimated incremental or proportional cost of adaptation is counted. This approach may also be
19
applied to project preparation activities if appropriate, depending on the standard practices of the specific MDB
in question.
3) Reporting of project activities with dual benefits
Where the same project, sub-project or project element contributes to climate mitigation and adaptation, then
the MDB’s individual processes will determine what proportion is counted as mitigation or as adaptation, so that
the actual financing will not be recorded more than once. Some MDBs are reporting projects where the same
components or elements contribute to both mitigation and adaptation as a separate category (table 10). The
MDBs are continuing to work on the best reporting method for projects where the same components or
elements contribute to both mitigation and adaptation.
Table 11: Adaptation Sectors and Examples of Sub-Sectors
Sectors Grouping 17
Examples of Specific Sub-sectors
Water supplies
Water & Wastewater Systems
Wastewater infrastructure
Water resources management not included under “Other”
Primary agriculture & food production
Agricultural irrigation
Agricultural & Ecological Resources
Forestry
Livestock production
Fishing
Ecosystems (including ecosystem-based flood protection measures)
Manufacturing
Industry, Extractive Industries, Manufacturing & Trade
Food processing distribution & retail
Trade
Extractive industries (oil, gas, mining, etc.)
Coastal and Riverine Infrastructure (including built
flood protection infrastructure) 18
Construction
Transport
Energy, Transport, and other Built Environment and
Infrastructure
Urban development
Tourism 19
Waste management
Energy generation (including renewables)
Institutional Capacity
Cross Sectors and Other
Energy transmission and distribution
Technical services or other professional support to beneficiary
organisations
ICT hardware and software to beneficiary organisations
Financial services (banking, insurance)
Human capacity (education, health)
Disaster risk management
Cross-sector policy and regulation
17
This year’s report shows a slightly different grouping of the adaptation sectors from the 2012 report. Two sub-sectors were
moved to the main sector column, namely Coastal and Riverine Infrastructure and Institutional Capacity, which previously
had been included as sub-sectors in categories: Energy, transport, and other built environment and infrastructure, and Cross
sectors and Other respectively. These sub-sectors have been dominating the adaptation breakdown figures for three years
2011/2012/2013 and thus it was felt they should be reported separately.
18
Natural flood protection, e.g. mangrove restoration, is normally included under “Ecosystems (including ecosystem-based
flood protection measures)”.
19
Tourism is included in this category as the sector essentially revolves around ‘built environment’, e.g. hotels, transport
facilities.
20
Table 12: Indicative Examples of Climate Resilience Activities by Sub-Sector
Potential sectors
Financial services
ICT (Hardware)
Manufacturing
Trade
Professional services
Potential impact of climate change
Potential adaptation activity
Increased strain on banking sectors as clients
experience climate impacts
Damage to key national data centres from storms or
floods
Historic specifications for equipment inappropriate
under new climate
Disruption of national trade due to climate disasters
Creation of dedicated financing mechanisms to
promote the uptake of climate resilient technologies
Identification of sites at greatest risk and
enhancement of resilience of those sites
Design of climate resilient equipment, e.g. stable
cranes for harbours in cyclone zones
Local government support for business continuity
planning amongst local employers
Provision of finance to SMEs providing relevant
services, e.g. engineering or insurance
Technical capacity building for training the trainers
in water and agri-sectors
More robust building regulations and improved
enforcement practices
Increased intensity of seismic survey and offshore
drilling outside hurricane seasons
Monitoring of changes in disease outbreaks and
development of a national response plan
Financial assistance for improved planning of
government bodies/NGOs integrating climate
change scenarios in their planning activities.
Improved catchment management planning and
regulation of abstraction
Provision of microfinance for domestic rainwater
harvesting equipment and storage
Completion of a climate risk assessment prior to
location of landfill sites
Investment in coal fired generators with minimal
cooling water requirements
Hydro-infrastructure subject to due diligence against
climate and hydrological models
Investment in embedded renewable generation to
reduce distribution requirements
Diversification of tourist attractions to encompass
biodiversity/conservation
Use of revised recurrence intervals for extreme
events in infrastructure design
Identification of protected areas and establishment
of migration corridors for at-risk ecosystems’ wild
life (animals)
Engagement with local communities to limit the
source, and improved forest fire management
Provision of information on crop diversification
options, with assessment of costs
Increased production of fodder crops to supplement
rangeland diet
Adoption of sustainable aquaculture techniques to
supplement local fish supplies
Asset review to identify assets vulnerable to
increased flooding, then prioritise protection works
Increase in the demand for professional services for
climate risk assessment
Climate change results in technical syllabus is
outdated for high risk sectors
Shift in zones affected by typhoons/ hurricanes/storm
surges
Shift in zones affected by typhoons/ hurricanes
Education
Construction
Oil, gas, mining
Health
Disaster risk management
Changing patterns of diseases as a result of changing
climatic conditions
Increased frequency and/or intensity of climate
related disasters
Water resources
Reduction in river water levels due to reduced rainfall
(Waste) water infrastructure
Increased groundwater salinity due to sea level rise
and/or coastal flooding
Increased risk of pollution of areas below landfill sites
due to risk of flood
Increased seasonality of rainfall, creating periods of
low river flows
Reduction in river flows lead to loss of generation
from hydroelectric plant
Higher temperatures reduce distribution efficiency
Waste management
Fossil fuel energy generation
Renewable energy
Transmission and distribution
Tourism
Transport
Ecosystems
Drought disrupts mammal migrations and causes
large scale starvation
More extreme river flows cause erosion of
embankments and loss of bridges
Drought causes loss of forest cover with impacts on
livelihoods/biodiversity
Forestry
Increased frequency of forest fires
Agriculture
Increased variability in crop productivity
Livestock production
Loss of forage quantity or quality
Fishing
Loss of river fish stocks due to changes in water flows
and/or temperature
Increased urban flooding from extreme rainfall events
Urban development
4) Adaptation case studies
The following case studies are intended to illustrate how the adaptation finance tracking approach has been
recently used by MDBs.
21
Project
Focus
Sector
Climate Resilience
Agriculture and Ecological Resources
Brief
description
of project
The project aims to foster food security,
sustained growth and poverty reduction
by strengthening the climate change
adaptive capacity of about 800,000
people in a region that depends on rainfed agriculture for their subsistence.
More specifically the project will
strengthen the capacity of communities
to cope with floods and droughts.
Climate
vulnerability
context
According to a climate change
assessment made by the concerned
country’s government, there is increasing
intensity of floods and droughts. This is
projected to worsen in coming decades.
Over the last three decades, floods and
droughts are estimated to have cost the
country 0.4% of annual economic
growth. The project document outlines
this evidence as the basis for the project
action.
Social Protection System
A river basin improvement project
Road system improvement investment
Cross sectors and Other / Human capacity
(education, health)
The programme is a development policy loan
with 8 prior actions focusing on 5 main themes
of support namely: (i) strengthening policy
development and management capacity of the
social protection (SP) sector; (ii) integrating
management information systems (MIS) for
the main social protection programmes; (iii)
establishing operational links between social
protection and early warning systems, with the
ultimate objective of “climate-proofing” social
protection programmes; and (iv) expanding the
coverage and enhancing the harmonisation of
social protection interventions in the country.
The government of the country concerned has
recognised the impact that climate risks can
have on livelihoods and the production
sectors, particularly on agricultural production.
The vast majority of the population relies
primarily on rain-fed agriculture for
subsistence, making it vulnerable to increasing
weather-related risks and the effects of climate
change. This has been analysed in the
country’s National Adaptation Programmes of
Action to climate change (NAPA).
Water and Wastewater Systems (water resources
management)
The project aims to improve water security and
resilience to potential climate change impact. The
project will finance the construction of upstream
water storage, riverbed oxygenating weirs, riverbank
beautification, and community initiatives to improve
the river environment. The project will also support
the establishment of a river basin organisation with
adequate capacity and decision support systems for
integrated water resources management (IWRM).
Energy, transport, and other built environment
and Infrastructure (Transport)
The project aims to enhance connectivity across
provinces through the construction of two major
bridges, a road connecting the two bridges, and
approach roads.
An analysis of likely changes of temperature and
rainfall was conducted during project preparation to
appraise the resilience of the proposed infrastructure
investments to climate change. The analysis used
results from a general circulation model and two
emissions scenarios, as well as results of downscaled
projections described in recent studies. The analysis
revealed an increase in the average mean maximum
temperature and a decrease in the annual rainfall.
Climate-induced risks to water resources facilities in
the river basin included flooding, landslides and
sedimentation as well as greater unreliability of dry
season flows, and risks to water supplies and
irrigation during the lean season. It was found that
the reduction in rainfall during the first 20 years
would not affect the filling capacity of the reservoir as
current available runoff was estimated at 160% of
reservoir capacity. Variations from year-to-year were
projected to increase with more extremes. Therefore,
regulation through reservoirs was required to
maintain the flow in the river during the dry season.
The project is located in a coastal area identified as
one of the world’s most vulnerable regions to
climate change. An analysis of regional assessment
showed that predicted regional changes in climate
include increased intensity of precipitation,
higher storm surges and sea-level rise. These
changes would result in increases in both the
magnitude and frequency of floods and storms,
and induce greater seasonal variability in weather
patterns in the project area. Taken together, these
risks would potentially reduce the intended design
life of the large infrastructure. A climate risk and
vulnerability assessment was conducted to further
identify the negative impacts of these changes on
the project performance. The study found that the
embankments of the connecting road were
vulnerable to the combined impacts of projected
increases in the frequency and intensity of
upstream flooding. Projected impacts included: (1)
erosion of road embankments and scour of road
foundations; (2) water logging of road foundations
leading to road subsidence; (3) reduced stability of
infrastructure; and (4) increased maintenance
effort.
22
Statement
of purpose
or intent
The project is designed for climate
change adaptation in agriculture under
the Pilot Program for Climate Resilience
of the Climate Investment Funds (CIF).
The project meets the funding criteria of
the CIF on climate resilience.
Link to
project
activities
All project components contribute to the
climate change adaptive capacity of the
affected region/community. The project
includes community-driven participatory
adaptation and adaptation practices plus
project management activities.
Calculation
of
adaptation
finance
Total project amount (USD 38 million)
considered climate finance adaptation.
Type of
adaptation
finance
External finance
Stronger coordination is needed across various
sectors and agencies in developing and
implementing a comprehensive approach to
climate risk management that incorporates
adaptation to historical climate variability and
projected climate change and effectively uses
new climate-related financing. The project
seeks to enhance poor people’s capacity to
cope with shocks and aims to deal preemptively with the effects of climate change by
strengthening public agencies and establishing
links with disaster risk management.
The project is establishing operational links
between social protection and early warning
systems, with the ultimate objective of
climate-proofing
social
protection
programmes.
One of the 8 prior actions is on “climateproofing” the main social protection
programmes during their programming and
design as disasters are increasingly caused by
climate-related factors. Thus 1/8 or 12.5% of
the total project cost is attributed to climate
change adaptation (USD 6.25 million out of
USD 50 million).
Development policy operation
23
Dam construction and ground water recharge will
improve communities’ resilience to drought and
flood. The design capacity of the improved river
corridor will integrate anticipated impacts of climate
change with design standards for flood management.
The findings of the climate risk and vulnerability
assessment fed into the design of the
infrastructure.
Project adaptation measures include:
A capacity building component to formulate
adaptive basin management plans and
establish a river basin organisation with the
ability to account for the impacts of climate
change in the management of the basin;
Construction of a new storage reservoir
within the upper watershed to retain wet
season flows for release during the dry
season;
“Climate-proofing” the design of the
upstream reservoir by taking into account
the impacts on river hydrology and extreme
events;
Establishment of a flood forecasting and
early warning system to provide advanced
warning of flood events, and training on
response measures.
The total project cost is USD 36 million. Adaptation
measures are estimated to amount to USD 20 million
or 55.5% of the total project cost.
Project adaptation measures include:
- Additional embankment volume. During the
first phase, a nominal increase of 0.30 m in
finished road level for low-lying stretches of the
road was considered adequate for the medium
term; in the long term, beyond a 30-year
horizon, a second phase of adaptation would be
considered as part of further maintenance and
road upgrades and expansion;
- additional area of ground treatment due to
increased width of embankment;
- additional length of culverts due to increased
width of embankment;
- additional height of abutments and piers of six
bridges
Loan and grant-MDB resources
MDB resources
The project’s technical designs include climate
change adaptation measures such as increased
height for road embankments and larger clearance
for bridges to reduce climate change risks on the
project.
The additional cost of adaptation measures was
estimated at USD 4.5 million or 0.5% of project
cost.
4. JOINT MDB APPROACH FOR MITIGATION FINANCE REPORTING
1) Principles of the Joint MDB Mitigation Finance Reporting
The joint MDB approach for mitigation finance reporting is based on the following principles or attributes:
a) It is activity-based, namely, it focuses on the type of activity to be executed, and not on its purpose, the origin
of the financial resources, or its actual results.
b) The classification is ex-ante project implementation.
c) An activity can be a project or a project component: the joint approach aims to report on mitigation activities
disaggregated from non-mitigation activities through a reasonable level of data granularity by dissecting projects
into main components. For example, a project with a total cost of USD 100 million may have a USD 10 million
component for energy efficiency improvements – only the USD 10 million would be reported.
d) The joint approach measures financial flows, rather than greenhouse gas (GHG) emissions reduced by the
investment.
e) An activity can be labelled as contributing to climate change mitigation if it promotes “efforts to reduce or
limit greenhouse gas (GHG) emissions or enhance GHG sequestration.” 20 In the absence of a commonly agreed
method for GHG analysis among MDBs, mitigation activities considered in this joint approach are assumed to
lead to emission reductions, based on past experience and/or technical analysis. Ongoing efforts to harmonise
GHG analysis among MDBs should bring more consistency regarding the identification of many mitigation
activities in the long term.
f) The purpose of this joint approach is to establish practical, harmonised climate finance classification categories
without having to resort to long, complex studies or highly specialised experts.
g) The qualification of a project under this methodology does not imply specific evidence of its climate change
effects. Inclusion is not a substitute for project-specific theoretical and/or quantitative evidence of GHG
emissions mitigation, and projects seeking to demonstrate such effects must do so through project-specific data.
h) Where the same project, sub-project or project element contributes to climate mitigation and adaptation,
then the MDB’s individual processes will determine what proportion is counted as mitigation or as adaptation, so
that the actual financing will not be recorded more than once. Some MDBs are reporting projects where the
same components or elements contribute to both mitigation and adaptation as a separate category (table 10).
The MDBs are working on the best reporting method for projects where the same components or elements
contribute to both mitigation and adaptation.
20
OECD DAC. Definition of the Rio Marker on climate change mitigation: http://bit.ly/RioMit.
24
2) Typology of Mitigation Activities included in the Joint MDB Mitigation Finance Reporting
1.
2.
3.
4.
Demand-side, brownfield energy efficiency 21
1.1. Commercial and residential sectors (buildings)
1.1.1. Energy-efficiency improvement in lighting, appliances and equipment
1.1.2. Substitution of existing heating/cooling systems for buildings by cogeneration plants that
generate electricity in addition to providing heating/cooling 22
1.1.3. Retrofit of existing buildings: Architectural or building changes that enable the reduction of
energy consumption
1.1.4. Waste heat recovery improvements
1.2. Public services
1.2.1. Energy-efficiency improvement in utilities and public services through the installation of more
efficient lighting or equipment
1.2.2. Rehabilitation of district heating systems
1.2.3. Utility heat loss reduction and/or increased waste heat recovery
1.2.4. Improvement in utility-scale energy efficiency through efficient energy use and loss reduction.
1.3. Agriculture
1.3.1. Reduction in energy use in traction (e.g. efficient tillage), irrigation and other agricultural
processes
1.4. Industry
1.4.1. Industrial energy-efficiency improvements through the installation of more efficient equipment,
changes in processes, reduction of heat losses and/or increased waste heat recovery
1.4.2. Installation of cogeneration plants
1.4.3. More efficient facility - replacement of an older facility (old facility retired)
Demand-side, greenfield energy efficiency 23
2.1. Construction of new buildings
2.1.1. Use of highly efficient architectural designs or building techniques that enable the reduction of
energy consumption for heating and air conditioning, exceeding available standards and
complying with high energy efficiency certification or rating schemes
Supply-side, brownfield energy efficiency
3.1. Transmission and distribution systems
3.1.1. Retrofit of transmission lines or substations to reduce energy use and/or technical losses,
excluding capacity expansion
3.1.2. Retrofit of distribution systems to reduce energy use and/or technical losses, excluding capacity
expansion
3.1.3. Improving existing systems to facilitate the integration of renewable energy sources into the grid
3.2. Power plants
3.2.1. Renewable energy power plant retrofits
3.2.2. Energy-efficiency improvement in existing thermal power plant
3.2.3. Thermal power plant retrofit or replacement 24to fuel switch from a more GHG-intensive fuel to a
different, less GHG-intensive fuel type 25
3.2.4. Waste heat recovery improvements
Renewable Energy
4.1. Electricity generation, greenfield projects
4.1.1. Wind power
4.1.2. Geothermal power
4.1.3. Solar power (concentrated solar power, photovoltaic power)
4.1.4. Biomass or biogas power that does not decrease biomass and soil carbon pools
21
The general principle for brownfield energy efficiency activities involving substitution of technologies or processes is that (i)
the old technologies are substituted well before the end of their lifetime and the new technologies are substantially more
efficient, or (ii) new technologies or processes are substantially more efficient than those normally used in greenfield
projects.
22
At higher energy efficiency than separate production.
23
The general principle for greenfield activities is that they prevent a long-term lock-in in high-carbon infrastructure (urban,
transport and power sector infrastructure).
24
Replacement is included only when the owner of the plants is the same and has contractually agreed to close the old
plant(s) with an equivalent capacity (when the new one(s) is commissioned) and to feed the same electricity system.
25
Excluding replacement of coal by coal.
25
5.
6.
7.
4.1.5. Ocean power (wave, tidal, ocean currents, salt gradient, etc.)
4.1.6. Hydropower plants only if net emission reductions can be demonstrated
4.2. Transmission systems, greenfield
4.2.1. New transmission systems (lines, substations) or new systems (e.g. new information and
communication technology, storage facility, etc.) to facilitate the integration of renewable energy
sources into the grid
4.3. Heat production or other RE applications, greenfield or brownfield projects
4.3.1. Solar water heating and other thermal applications of solar power in all sectors
4.3.2. Thermal applications of geothermal power in all sectors
4.3.3. Thermal applications of sustainably-produced bioenergy in all sectors, including efficient,
improved biomass stoves
4.3.4. Wind-driven pumping systems or similar
Transport
5.1. Vehicle energy efficiency fleet retrofit
5.1.1. Existing vehicles, rail or boat fleet retrofit or replacement (including the use of lower-carbon fuels,
electric or hydrogen technologies, etc.)
5.2. Urban transport modal change
5.2.1. Urban mass transit
5.2.2. Non-motorised transport (bicycles and pedestrian mobility)
5.3. Urban development
5.3.1. Integration of transport and urban development planning (dense development, multiple land use,
walking communities, transit connectivity, etc.), leading to a reduction in the use of passenger
cars
5.3.2. Transport demand management measures to reduce GHG emissions (e.g. speed limits, highoccupancy vehicle lanes, congestion charging/road pricing, parking management, restriction or
auctioning of license plates, car-free city areas, low-emission zones) 26
5.4. Inter-urban transport and freight transport
5.4.1. Improvement of general transport logistics to increase energy efficiency of infrastructure and
transport, e.g. reduction of empty running
5.4.2. Railway transport ensuring a modal shift of freight and/or passenger transport from road to rail
(improvement of existing lines or construction of new lines)
5.4.3. Waterways transport ensuring a modal shift of freight and/or passenger transport from road to
waterways (improvement of existing infrastructure or construction of new infrastructure)
Agriculture, forestry and land use
6.1. Afforestation and reforestation
6.1.1. Afforestation (plantations) on non-forested land
6.1.2. Reforestation on previously forested land
6.2. Reducing emissions from the deforestation or degradation of ecosystems
6.2.1. Biosphere conservation projects (including payments for ecosystem services)
6.3. Sustainable forest management
6.3.1. Forest management activities that increase carbon stocks or reduce the impact of forestry
activities
6.4. Agriculture
6.4.1. Agriculture projects that do not deplete and/or improve existing carbon pools (reduction in
fertilizer use, rangeland management, collection and use of bagasse, rice husks, or other
agricultural waste, low tillage techniques that increase carbon contents of soil, rehabilitation of
degraded lands, etc.)
6.5. Livestock
6.5.1. Livestock projects that reduce methane or other GHG emissions (manure management with
biodigestors, etc.)
6.6. Biofuels
6.6.1. Production of biofuels (including biodiesel and bioethanol)
Waste and wastewater
7.1. Solid waste management that reduces methane emissions (e.g. incineration of waste, landfill gas
capture, and landfill gas combustion)
26
General traffic management is not included. This category is for demand management to reduce GHG emissions, assessed
on a case by case basis.
26
8.
9.
7.2. Treatment of wastewater if not a compliance requirement (e.g. performance standard or safeguard) as
part of a larger project including the reduction of methane emissions
7.3. Waste recycling projects that recover or reuse materials and waste as inputs into new products or as a
resource
Non-energy GHG reductions
8.1. Industrial processes
8.1.1. Reduction of GHG emissions resulting from industrial process improvements and cleaner
production (e.g. cement, chemicals)
8.2. Air conditioning and cooling
8.2.1. Retrofit of existing industrial, commercial and residential infrastructure to switch to cooling agent
with lower global warming potential
8.3. Fugitive emissions and carbon capture
8.3.1. Carbon capture and storage projects (including enhanced oil recovery)
8.3.2. Reduction of gas flaring or methane fugitive emissions in the oil and gas industry
8.3.3. Coal mine methane capture
Cross-sector activities and others
9.1. Policy and regulation
9.1.1. National mitigation policy/planning/institutions
9.1.2. Energy sector policies and regulations (energy efficiency standards or certification schemes;
energy efficiency procurement schemes; renewable energy policies)
9.1.3. Systems for monitoring the emission of greenhouse gases
9.1.4. Efficient pricing of fuels and electricity (subsidy rationalisation, efficient end-user tariffs, and
efficient regulations on electricity generation, transmission, or distribution),
9.1.5. Education, training, capacity building and awareness raising on climate change
mitigation/sustainable energy/sustainable transport; mitigation research
9.2. Energy audits
9.2.1. Energy audits for energy end-users, including industries, buildings, and transport systems
9.3. Supply chain
9.3.1. Improvements in energy efficiency and GHG reductions in existing product supply chains
9.4. Financing instruments
9.4.1. Carbon markets and finance (purchase, sale, trading, financing, guarantee and other technical
assistance). Includes all activities related to compliance-grade carbon assets and mechanisms,
such as Clean Development Mechanism (CDM), Joint Implementation (JI), Assigned Amount Units
(AAUs), as well as well-established voluntary carbon standards like the Verified Carbon Standard
(VCS) or the Gold Standard.
9.4.2. Renewable energy and energy efficiency financing through financial intermediaries or similar (e.g.
27
earmarked lines of credit; lines for microfinance institutions, cooperatives, etc.)
9.5. Low-carbon technologies
9.5.1. Research and development of renewable energy or energy efficiency technologies
9.5.2. Manufacture of renewable energy and energy efficiency technologies and products
9.6. Activities with greenhouse gas accounting
9.6.1. Any other activity not included in this list for which the results of ex-ante greenhouse gas
accounting (undertaken according to commonly agreed methodologies) show emission reductions
that are higher than a commonly agreed threshold 28
3) Mitigation case studies
The following case studies are intended to illustrate how the mitigation finance tracking approach has been
recently used by MDBs.
27
28
Reported as a separate category in table 8
For this year’s report, nothing was reported under this category.
27
Project Focus
Irrigation System Enhancement Project
Sector
Demand side, brownfield energy
efficiency - Agriculture (1.3.1)
The objectives of the Irrigation System
Enhancement Project are:
a) To reduce the amount of energy used
and to improve the irrigation
conveyance efficiency in targeted
irrigation schemes; and
b) To improve the availability and
reliability of sector data.
Brief description of
project
The project has three components each
with two sub-components:
1.A Conversion of pump-based irrigation
to gravity irrigation;
1.B Upgrading of outlet and other canals
conveying pumped water.
2.A Technical investigations;
2.B Supervisory control and data
acquisition (SCADA) system installation.
Forests Participatory Management
Project
Agriculture, forestry and land use (6.3.1)
The project aims to reduce deforestation
and forest degradation in order to
reinforce forests’ carbon sequestration
capacity through improved governance,
environment-friendly
local
socioeconomic development and sustainable
management of forest resources and
wooded areas. The project has the
following components:
•
Reinforcement
of
forest
governance: reinforcement of
legal framework and building of
administrative capacity.
•
Participatory development and
management of the concerned
forests: Forest securitisation
and
development
–
demarcation and creation of
gazetted forests (284,000 ha);
building
stakeholder
operational capacity; support
actions
for
neighbouring
communities.
3.A Project management;
3. B Water user associations’ support.
Improve Sustainability of Electricity Service
Renewable Energy – Solar power (4.1.3)
Transport – Urban mass transit (5.2.1)
The programme will contribute to the
sustainability of the power sector by
strengthening the National Electricity
Company’s (NEC) operational procedures
and corporate performance and by
improving the sustainability of rural
electricity supply. The specific objectives are:
The project will support improvements to
urban public transport, urban development
infrastructure schemes, the modernisation
of urban roads and education
infrastructure included in the investment
programme of the city concerned.
The programme will contribute to the
implementation of the city’s development
strategy and its integrated spatial
development plan.
I)
II)
To
support
the
implementation
of
information technologies in
business support tools;
To contribute to expanding
electricity coverage by grid
extension and renewable
energy systems.
The transport component of the project
includes a) a traffic management system
(intelligent traffic system), b) a passenger
ticketing system, and c) the modernisation
of tramway lines.
The component c) comprises :
III)
To provide financial support
for
upgrading
critical
infrastructure.
Component II - consists of:
- i) Integration of a specific geographical area
USD 7,500,000 to a grid electricity supply,
- ii) the installation of hybrid RE generation
to local distribution systems to improve
sustainability of electricity supply in small
rural town (regional civic centre)
USD 2,500,000,
- iii) Support for the design and
implementation of rural electrification
projects – USD 1,000,000.
28
Urban Public Transport Project
Modernisation of the tramway tracks and
power networks together with auxiliary
infrastructure.
-
Modernisation of the signalling
system
Replacement of power cables
Modernisation, refurbishment
and construction of
transformers, and
Modernisation and extension of
the tram depot
Statement of activity or
activities captured by
MDB methodologies
Conversion of pump-based irrigation to
gravity irrigation to reduce the amount
of energy used in irrigation.
The project will contribute to the
reduction of greenhouse gas (GHG)
emissions through reduced deforestation
and forest degradation.
Calculation of mitigation
finance
The first sub-component of Component
1 (i.e. 1. A) Financing the conversion of
pump-based irrigation to gravity
irrigation was counted as 100%
mitigation. The project management
sub-component (i.e. 3.A) was prorated
to component 1. A (i.e. 17% of project
management) and included in the
mitigation finance. Total mitigation
finance (1.A+ 17% of 3.A) was thus
estimated at 48% of the total finance
(USD 14.28 million of USD 30 million).
Investment loan
The project is counted as 100%
mitigation
Type of mitigation
finance
External resources: grant
29
Sub-component II) ii) will finance the
upgrade of the electricity grid to provide
high-quality service on a 24-hour basis to 494
households and other end-users in the
project’s area by adding (to the existing
diesel generators) complementary solar PV
systems to feed the local distribution
network. The upgrade also involves the site
preparation for the installation of
approximately 200 PV panels, and a battery
bank to guarantee reliability and a 24-hour
supply.
Only sub-component II) ii): “Provision of
quality service in civic centre” in the amount
of USD 2.5 million (8% of total loan volume)
qualifies as climate mitigation finance.
Modernisation of tramlines and the tram
depot will support sustainable urban mass
transport in the city centre. The overall
impact of the investment will be to support
sustainable urban mass transport and
reduce GHG emissions whilst improving
safety and air pollution.
MDB resources- Investment nonconcessional loan
Framework loan (concessional loan)
The project was financed under a
framework loan from different resources
including grant. The contribution to
climate change mitigation was set at 45%
(of the loan) allocated to component C),
which results in the amount of USD 34.9
million as climate change mitigation. This
represents 14.6% of the total investment
cost of the project.
4) Mapping mitigation sectors (shown in table 8) against the Mitigation Typology
Table 13: Mitigation Sector Definition
Sector Label
Energy efficiency
Renewable energy
Transport
Agriculture, forestry and land use
Waste and wastewater
Cross-sector activities and others
EE and RE financing through financial intermediaries
Mapped Sections of the Typology
Sections 1-3 of the typology
Section 4 of the typology
Section 5 of the typology
Section 6 of the typology
Section 7 of the typology
Sections 8 -9 of the typology (except 9.4.2)
Section 9.4.2
This report was prepared by professional staff at the Multilateral Development Banks. The opinions expressed in this
publication are those of the authors and do not necessarily reflect the views of the MDBs, their governing bodies or their
members.
30
© EIB – 09/2014